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Bank overdraft as a short term source of fund is


Question

Bank overdraft as a short term source of fund is

Options

A) an overdrawn account

B) granted to a newly opened account

C) repayable after more than a year

D) a current liability

The correct answer is A.

Explanation:

One of the most important external sources of short-term finance, particularly for smaller businesses, is the overdraft. An overdraft facility allows the business to spend more money than is deposited in the bank account. The amount of the overdraft will rise and fall as funds are deposited and spent from the account.

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Discussion (2)

  • One of the most important external sources of short-term finance, particularly for smaller businesses, is the overdraft. An overdraft facility allows the business to spend more money than is deposited in the bank account. The amount of the overdraft will rise and fall as funds are deposited and spent from the account.

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  • Abdullahi Saleh

    Current ability

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